Bauer attended high school in Haifa and at sixteen, inspired by his history teacher, Rachel Krulik, decided to dedicate himself to studying history. Upon completing high school, he joined the Palmach. He attended Cardiff University in Wales on a British scholarship, interrupting his studies to fight in the 1948 Arab-Israeli War, after which he completed his degree.

Bauer returned to Israel to join KibbutzShoval and began his graduate work in history at Hebrew University. He received his doctorate in 1960 for a thesis on the British Mandate of Palestine. The following year, he began teaching at the Institute for Contemporary Jewry at the Hebrew University.

Bauer is a respected authority on the subjects of the Holocaust, antisemitism—a word he insists be written unhyphenated[4]—and the Jewish resistance movement during the Holocaust, and has argued for a wider definition of the term. In Bauer's view, resistance to the Nazis comprised not only physical opposition, but any activity that gave the Jewish people dignity and humanity in the most humiliating and inhumane conditions. Furthermore, Bauer has disputed the popular view that most Jews went to their deaths passively—"like sheep to the slaughter."[5] He argues that, given the conditions in which the Jews of Eastern Europe had to live under and endure, what is surprising is not how little resistance there was, but rather how much.

With regard to the functionalism versus intentionalism question, Bauer started out as an Intentionalist, but is now the leading proponent of a synthesis of the two schools. Bauer argues that on the basis of Heinrich Himmler's memorandum of May 25, 1940 to Adolf Hitler regarding the "Final Solution of the Jewish Question"—in which Himmler states his rejection of "the Bolshevik method of physical annihilation of a people out of inner conviction as un-German and impossible," and goes on to recommend the Madagascar Plan as the desired "territorial solution" of the "Jewish Question"—proves that there was no master plan for genocide going back to the days when Hitler wrote Mein Kampf. However, Bauer takes issue with Functionalist historians, such as Hans Mommsen, who argue that the lead in the Holocaust was taken entirely by lower level officials with little involvement by the leadership in Berlin.

Bauer believes that Hitler was the key figure in causing the Holocaust, and that at some point in the later half of 1941, he gave a series of orders for the genocide of the entire Jewish people. Bauer has pointed to the discovery of an entry in Himmler’s notebook from December 18, 1941 where Himmler wrote down the question "What to do with the Jews of Russia?". According to the same notebook, Hitler’s response to the question was "Exterminate them as partisans."[6] In Bauer’s view, this is as close as historians will ever get to a definitive order from Hitler ordering the Holocaust.[6] Bauer believes that, at about the same time, Hitler gave further verbal orders for the Holocaust, but that unfortunately for historians, nobody bothered to write them down.

Bauer has often criticized what he considers to be deleterious trends in writing about the Holocaust. He has often taken exception to those who argue that the Holocaust was just another genocide. Though he agrees that there have been other genocides in history that have targeted groups other than Jews, he argues that the Holocaust was the worst single case of genocide in history, in which every member of a nation was selected for annihilation, and that it therefore holds a special place in human history. These views have caused clashes between Bauer and the American historian Henry Friedlander who argues that Romani and the disabled were just as much victims of the Holocaust as Jews were. However, Bauer has said that the Romani were subject to genocide (just not "the Holocaust) and has supported the demands of Romani for reparations from Germany.[7]

Another trend Bauer has denounced is the representation of the Holocaust as a mystical experience outside the normal range of human understanding. He has argued against the work of some Orthodox rabbis and theologians who say that the Holocaust was the work of God and part of a mysterious master plan for the Jewish people. In Bauer’s view, those who seek to promote this line of thinking argue that God is just and good, while simultaneously bringing down the Holocaust on the Jewish people. Bauer has argued that a God who inflicts the Shoah on his Chosen People is neither good nor just. Moreover, Bauer has argued that this line of reasoning robs Adolf Hitler of his evil: if Hitler was just fulfilling God’s will regarding the Jews, then he was merely an instrument of divine wrath and did not choose to be evil.[citation needed]

Bauer has criticized the work of the American political scientist Daniel Goldhagen, who writes that the Holocaust was the result of the allegedly unique “eliminationist” antisemitic culture of the Germans. He has accused Goldhagen of Germanophobic racism, and of selecting only evidence favorable to his thesis. For example, Bauer has written that, according to the 1931 German census, about 50,000 German Jews were living in mixed marriages with Christians, giving Germany one of the highest rates of mixed marriages in the world at the time. In Bauer’s opinion, if the average German had been full of murderous “eliminationist" antisemitism, as Goldhagen argues, there would have been fewer mixed marriages.[citation needed] Goldhagen in his turn has accused Bauer of not understanding his arguments properly and of being jealous of what Goldhagen considers to be his discovery of the “key” that explains the entire Holocaust.[citation needed]

In reference to the conquest of Canaan by the ancient Israelites, which resulted in the massacre of the Amalekites and Midianites, genocide historian Adam Jones has quoted Bauer: "As a Jew, I must live with the fact that the civilization I inherited ... encompasses the call for genocide in its canon."[10]

While speaking to a group of visitors to Israel in 2003, Bauer stated that "What we have here between the Israelis and the Palestinians is an armed conflict - if one side becomes stronger there is a chance of genocide." When one of the visitors asked, "Am I to understand that you think Israel could commit genocide on the Palestinian people?," Bauer answered "Yes," and added, "Just two days ago, extremist settlers passed out flyers to rid Arabs from this land. Ethnic cleansing results in mass killing." Bauer also noted opinion polls showing a high percentage of Palestinians want to get rid of Jews.[11]

In January 2012, Bauer's article in the Israel Journal of Foreign Affairs entitled "The Holocaust, America and American Jewry"[12] precipitated a bitter debate between himself, Rafael Medoff (Wyman Institute) and Alexander J. Groth (University of California, Davis), on what the US Government and the Jews of America could and could not have done to rescue the Jews of Europe.[13]

Concerning Pope Benedict XVI's pilgrimage to Israel and Jordan, Bauer argued that the Pope meant well and tried to walk the tightrope between Arab-Palestinian-Muslim and Palestinian-Christian enmity to Israel and the Jews on the one hand, and the collective trauma of Jews in Israel and elsewhere regarding the Holocaust on the other.[14]

ed., Present-day Antisemitism: Proceedings of the Eighth International Seminar of the Study Circle on World Jewry under the auspices of the President of Israel, Chaim Herzog, Jerusalem 29–31 December 1985. Jerusalem: The Vidal Sassoon International Center for the Study of Antisemitism, The Hebrew University, 1988

Out of the ashes: The impact of American Jews on post-Holocaust European Jewry. Oxford: Pergamon Press, c1989

"Gypsies" in Yisrael Gutman and Michael Berenbaum, eds. Anatomy of the Auschwitz death camp Bloomington: Indiana University Press, in association with the United States Holocaust Memorial Museum, Washington, D.C. c1994. ISBN 0-253-32684-2

Menachem Z. Rosensaft and Yehuda Bauer (eds.) Antisemitism: threat to Western civilization. Jerusalem: Vidal Sassoon International Center for the Study of Antisemitism, The Hebrew University of Jerusalem, 1989. ISBN 965-222-126-0. (Papers based on a conference held at the New York University School of Law, 27 October 1985).

Yehuda Bauer (ed.) The danger of Antisemitism in Central and Eastern Europe in the wake of 1989-1990. Jerusalem: The Vidal Sassoon International Center for the Study of Antisemitism, The Hebrew University of Jerusalem: c1991. ISBN 965-222-242-9 (Based on a conference held October 28–29, 1990, in Jerusalem)